Blackstone, KKR Move to Settle Buyout Deal Suit

Shasha Dai broke the news that Blackstone Group and KKR & Co. were in advanced negotiations to settle a lawsuit alleging that some of the largest private-equity firms in the U.S. colluded during the past decade’s buyout boom in an attempt to keep prices down for companies they acquired. Blackstone and KKR will likely be parties in the same settlement agreement rather than reaching separate deals with the plaintiffs, according to sources.

The story as it appeared on Dow Jones:
July 17, 2014 – 6:40 PM ET: Blackstone, KKR Move to Settle Buyout Deal Suit

Blackstone Group and KKR & Co. are in advanced negotiations to settle a closely watched lawsuit alleging that some of the largest private-equity firms in the U.S. colluded during the past decade’s buyout boom in an attempt to keep prices down for companies they acquired, said people familiar with the situation.

A settlement agreement could be reached in the next few weeks, the people said.

Blackstone and KKR will likely be parties in the same settlement agreement rather than reaching separate deals with the plaintiffs, the people added. The New York firms are the latest to seek a settlement with the plaintiffs following agreements disclosed during the past month by three other defendants named in the suit: private-equity firms Silver Lake and Bain Capital and investment bank Goldman Sachs Group Inc.

All defendants in the suit have said they believe the suit is without merit. Silver Lake said it believed its settlement was in the best interests of its fund investors, ending more than six years of litigation, expense and distraction. Goldman and Bain denied any wrongdoing in the settlements.

Silver Lake agreed this month to pay $29.5 million. In June, Goldman and Bain agreed to pay a combined $121 million to settle the suit.

The monetary amount of the proposed settlement by Blackstone and KKR couldn’t be learned.

If approved, the proposed settlement would leave two last defendants in the lawsuit: TPG Capital and Carlyle Group LP. A TPG spokesman declined to comment, as did a Carlyle spokesman.

The lawsuit, filed by individual and institutional shareholders that sold stocks to buyout firms during some of the largest leveraged takeovers in the middle of the past decade, alleges that the buyout firms agreed not to “jump” each other’s deals, or try to trump an offer in an announced deal. The plaintiffs claimed in the suit that the practice drove down prices paid to shareholders.

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